HOMEINNS HOTEL GROUP SHANGHAI, May 12, 2015 /PRNewswire/ -- Homeinns Hotel Group (NASDAQ: HMIN) ("Homeinns" or "the Company"), a leading economy hotel chain in China, today announced its unaudited financial results for the first quarter ended March 31, 2015.
First Quarter 2015 Financial and Operational Highlights
-- Total revenues were RMB 1.47 billion (US$237.2 million) for the first
quarter of 2015, a decrease of 0.1% year over year, but within the
recently provided guidance range.
-- Net loss attributable to ordinary shareholders was RMB 37.6 million
(US$6.1 million) for the first quarter of 2015, compared with net income
of RMB 74.9 million for the first quarter of 2014. Adjusted net income
attributable to ordinary shareholders (non-GAAP) was RMB 2.0 million
(US$0.3 million) for the first quarter of 2015, a decrease of 93.9% year
over year.
-- EBITDA (non-GAAP) decreased 40.6% year over year to RMB 177.0 million
(US$28.6 million) for the first quarter of 2015. Adjusted EBITDA
(non-GAAP) decreased 15.1% year over year to RMB 216.5 million (US$34.9
million) for the first quarter of 2015.
-- Net operating cash inflow decreased 94.1% year over year to RMB 9.1
million (US$1.5 million) for the first quarter of 2015.
-- As of March 31, 2015, Homeinns Hotel Group operated 2,661 hotels across
338 cities in China, including a net addition of 52 hotels during the
first quarter of 2015.
"We achieved revenue in line with our previously provided guidance, which reflected our expectations for a challenging start to the year in very difficult market conditions," said Mr. David Sun, the Company's chief executive officer. "While we continued to make meaningful progress in rolling out new business initiatives, controlling costs, and driving beneficial efficiencies in our business, the first quarter was one of the most difficult periods for our business since Homeinns was established in 2002. A deepened economic slowdown, the fact that the first quarter is normally our slowest period and the later timing of Chinese New Year versus last year together put rather significant pressure on our revenue per available room, which had a negative impact on our overall profitability for the period."
Mr. Sun continued, "Looking ahead to the remainder of 2015, we are not seeing immediate signs of a market rebound at the moment but remain confident about the long-term prospects of the overall travel and lodging market in China. While the macroeconomic environment can be cyclical, and is out of our control as well as beyond what we can accurately predict at present, we continue to focus on what we can do and have done well consistently, namely refining product offerings, improving customer service, and delivering operating and cost efficiencies, all to ensure we remain as competitive and resilient as possible in the current market. On top of this, we will further develop our mid-scale hotels and continue to drive various new initiatives that are focused on meeting the evolving needs of our customers. We believe that all of this will leave us well positioned to capture opportunities when China's economy improves and deliver long-term value for our shareholders."
Hotel Development
Hotels in Operations and Pipeline Openings Closures
--------------------------------- -------- --------
Group Homeinn Motel Fairyland Yitel Homeinn Plus* 1Q15 1Q15
----- ------- ----- --------- ----- ------------ ---- ----
Total Number of Hotels 2,661 2,179 400 34 48 70 18
Leased-and-Operated 912 703 164 25 20 4 6
Franchised-and-Managed 1,749 1,476 236 9 28 66 12
Contracted or under Construction 209 142 36 2 17 12
Leased-and-Operated 28 6 6 1 9 6
Franchised-and-Managed 181 136 30 1 8 6
Under Due Diligence 172 150 19 0 3 0
* "Homeinn Plus" is a mid-scale brand newly launched in April 2015.
Operating Metrics
Total Hotels Hotels Opened for
at least 18
Months
------------
1Q2015 4Q2014 1Q2014 1Q2015 1Q2014
------ ------ ------ ------ ------
Occupancy Rate 79.3% 79.6% 81.3% 80.8% 83.5%
Average Daily rate (ADR, RMB) 151 163 156 151 156
Revenue per Available Room (RevPAR, RMB) 120 130 127 122 130
For the first quarter of 2015, occupancy rate decreased by 2.0 percentage points while ADR decreased by 3.2%, resulting in a year-over-year decrease of 5.5% in RevPAR. The decrease in RevPAR was mainly due to continued difficult market conditions in the first quarter of 2015. Sequentially, RevPAR decreased by 7.7%, mainly due to the fact that the first quarter is normally the slowest period in a year for the Company and the overall hotel industry.
As of March 31, 2015, a total of 1,991 hotels were in operation for at least 18 months. These hotels' occupancy rate declined year over year from 83.5% to 80.8%, and ADR decreased year over year from RMB 156 to RMB 151, resulting in a decrease in RevPAR by 6.2% from RMB 130 to RMB 122 during the first quarter of 2015.
Homeinns Hotel Group had a total of 28.1 million unique non-corporate members under its frequent guests program as of March 31, 2015.
Key Financial Results for First Quarter 2015
Revenues
(RMB/USD in Millions) First Quarter 2015 First Quarter 2014
--------------------- ------------------ ------------------
RMB USD RMB V%
--- --- --- ---
Leased-and-Operated Hotels 1,244.7 200.8 1,279.2 -2.7%
Franchised-and-Managed Hotels 225.7 36.4 193.3 16.8%
----- ---- -----
Total Revenues 1,470.5 237.2 1,472.5 -0.1%
Less: Business Taxes -88.4 -14.3 -94.3 -6.3%
----- ----- ----- ----
Net Revenues 1,382.1 223.0 1,378.2 0.3%
------- ----- ------- ---
Note: "V%" represents year-over-year percentage change in amounts
Revenues from leased-and-operated hotels decreased 2.7% year over year to RMB 1.24 billion (US$200.8 million) for the first quarter of 2015. The year-over-year decrease in revenues from leased-and-operated hotels was mainly due to a decrease in RevPAR.
Revenues from franchised-and-managed hotels increased 16.8% year over year to RMB 225.7 million (US$36.4 million) for the first quarter of 2015. The year-over-year increase in revenues from franchised-and-managed hotels was mainly driven by an increase in the number of hotels and hotel rooms in operation, partially offset by a decrease in RevPAR.
Total Operating Costs and Expenses / Income from Operations
(RMB/USD in Millions) First Quarter 2015
Adjusted
GAAP Results Non-GAAP Results*
RMB USD Vpts RMB USD Vpts
--- --- ---- --- --- ----
Leased-and-Operated Hotel Costs 1,264.2 203.9 3.7pts 1,261.0 203.4 3.7pts
Personnel Costs of Franchised-and-Managed Hotels 44.0 7.1 0.4pts 40.2 6.5 0.4pts
Sales and Marketing Expenses 22.3 3.6 -0.2pts 22.0 3.6 -0.2pts
General and Administrative Expenses 73.9 11.9 0.2pts 55.4 8.9 0.2pts
---- ---- ------ ---- --- ------
Total Operating Costs and Expenses 1,404.3 226.5 4.1pts 1,378.6 222.4 4.2pts
Loss/Income from Operations -10.7 -1.7 n/a 15.1 2.4 -3.7pts
----- ---- --- ---- --- -------
*Adjusted Non-GAAP results exclude share-based compensation expenses and integration costs.
Note: "Vpts" represents year-over-year change in percentage points of total revenues
Total operating costs and expenses were RMB 1.40 billion (US$226.5 million) for the first quarter of 2015, representing 95.5% of total revenues for the quarter. Total operating costs and expenses excluding any share-based compensation expenses and integration costs (non-GAAP) for the first quarter of 2015 were 93.7% of total revenues, compared to 89.6% in the same period a year ago.
-- Total leased-and-operated hotel costs were RMB 1.26 billion (US$203.9
million) for the first quarter of 2015, representing 101.6% of the
leased-and-operated hotel revenues for the quarter, compared to 94.7% in
the same period a year ago. Total leased-and-operated hotel costs
excluding any share-based compensation expenses and integration costs
(non-GAAP) were 101.3% of the leased-and-operated hotel revenues in the
first quarter of 2015, compared to 94.4% in the same period a year
ago.Pre-opening cost was RMB 20.9 million (US$3.4 million) for the first
quarter of 2015, compared to RMB 5.9 million in the first quarter of
2014.The year-over-year increase in total leased-and-operated hotel
costs as a percentage of leased-and-operated hotel revenues for the
first quarter of 2015 was mainly due to the decreased RevPAR resulting
in a lower revenue base per hotel while a significant portion of the
hotel cost was fixed, as well as to the higher pre-opening cost in the
first quarter of 2015.
-- Personnel costs of franchised-and-managed hotels were RMB 44.0 million
(US$7.1 million) for the first quarter of 2015, representing 19.5% of
the franchised-and-managed hotel revenues for the first quarter of 2015,
compared to 19.9% in the same period a year ago. Franchised-and-managed
hotels personnel costs excluding share-based compensation expenses
(non-GAAP) were 17.8% of franchised-and-managed hotel revenues in the
first quarter of 2015, compared to 18.0% in the same period of 2014. The
year-over-year decrease in personnel costs of franchised-and-managed
hotels as a percentage of franchised-and-managed hotel revenues for the
first quarter of 2015 was mainly due to lower performance-related
bonuses in the quarter.
-- Sales and marketing expenses were RMB 22.3 million (US$3.6 million) for
the first quarter of 2015, representing 1.5% of total revenues for the
quarter, compared to 1.7% in the same period a year ago. Sales and
marketing expenses excluding share-based compensation expenses
(non-GAAP) were 1.5% of total revenues for the first quarter of 2015,
compared to 1.7% in the same period of 2014. The year-over-year decrease
in sales and marketing expenses as a percentage of total revenues for
the first quarter of 2015 was mainly due to the timing of certain
marketing activities.
-- General and administrative expenses were RMB 73.9 million (US$11.9
million) for the first quarter of 2015, representing 5.0% of total
revenues, compared to 4.8% in the same period a year ago. General and
administrative expenses excluding share-based compensation expenses and
integration costs (non-GAAP) were 3.8% of total revenues for the first
quarter of 2015, compared to 3.5% in the same period of 2014. The
year-over-year increase in general and administrative expenses as a
percentage of total revenues for the first quarter of 2015 was mainly
due to higher investment in IT resources.
Loss from Operations was RMB 10.7 million (US$1.7 million) for the first quarter of 2015, compared to income from operations of RMB 42.4 million in the same period a year ago. Income from operations excluding share-based compensation expenses and integration costs (non-GAAP) for the first quarter of 2015 was RMB 15.1 million (US$2.4 million), or 1.0% of total revenues, compared to RMB 70.0 million, or 4.8% of total revenues, in the same period of 2014. The year-over-year decrease in income from operations margin rate for the quarter was mainly due to lower revenue base per hotel and higher pre-opening cost, partially offset by the increased mix of higher-margin revenue contribution from franchised-and-managed operations.
EBITDA (non-GAAP)
(RMB/USD in Millions) First Quarter 2015 First Quarter 2014
------------------ ------------------
RMB USD %Rev V% RMB USD %Rev
--- --- ---- --- --- --- ----
EBITDA (Non-GAAP) 177.0 28.6 12.0% -40.6% 297.9 48.1 20.2%
Net Foreign Exchange Loss 4.1 0.7 0.3% 15.2 2.4 1.0%
Share-Based Compensation Expenses 24.3 3.9 1.7% 25.5 4.1 1.7%
Integration Cost 1.5 0.2 0.1% 2.1 0.3 0.1%
Loss on buy-back of convertible notes 0.1 0.0 0.0% - - -
Loss / (Gain) on Fair Value Change in Convertible Notes 9.6 1.5 0.7% -85.5 -13.8 -5.8%
---
Adjusted EBITDA (Non-GAAP) 216.5 34.9 14.7% -15.1% 255.2 41.2 17.3%
===== ==== ==== ===== ===== ==== ====
Note: "%Rev" represents amount as a percentage of total revenues
"V%" represents year-over-year percentage change in amounts
Net Income Attributable to Ordinary Shareholders
(RMB/USD in Millions) First Quarter 2015 First Quarter 2014
------------------ ------------------
RMB USD %Rev V% RMB USD %Rev
--- --- ---- --- --- --- ----
Net Loss / Income (GAAP) -37.6 -6.1 -2.6% - 74.9 12.1 5.1%
Net Foreign Exchange Loss 4.1 0.7 0.3% 15.2 2.4 1.0%
Share-Based Compensation Expenses 24.3 3.9 1.7% 25.5 4.1 1.7%
Integration Cost 1.5 0.2 0.1% 2.1 0.3 0.1%
Loss on buy-back of convertible notes 0.1 0.0 0.0% - - -
Loss / (Gain) on Fair Value Change in Convertible Notes 9.6 1.5 0.7% -85.5 -13.8 -5.8%
Adjusted Net Income (Non-GAAP) 2.0 0.3 0.1% -93.9% 32.1 5.2 2.2%
=== === === ===== ==== === ===
Note: "%Rev" represents amount as a percentage of total revenues
"V%" represents year-over-year percentage change in amounts
Adjusted Net Income Attributable to Ordinary Shareholders (Non-GAAP) decreased year over year by 93.9% to RMB 2.0 million (US$0.3 million) for the first quarter of 2015, representing 0.1% of total revenues, compared to 2.2% in the same period a year ago. The year-over-year decrease in adjusted net margin rate (non-GAAP)[1] was mainly due to a decrease in adjusted income from operations margin rate (non-GAAP)[2], partially offset by higher interest income and lower interest expense.
Basic and Diluted Earnings Per Share / Earnings Per ADS
First Quarter 2015
------------------
Ordinary Share ADS Share
RMB USD RMB USD
--- --- --- ---
Basic -0.39 -0.06 -0.78 -0.13
Diluted -0.39 -0.06 -0.78 -0.13
Adjusted Basic (Non-GAAP) 0.02 0.00 0.04 0.01
Adjusted Diluted (Non-GAAP) 0.02 0.00 0.04 0.01
Cash Flow
Net operating cash inflow for the first quarter of 2015 was RMB 9.1 million (US$1.5 million), compared to RMB 154.9 million in the same period of 2014. Capitalized expenditures for the first quarter of 2015 were RMB 120.9 million (US$19.5 million), while related cash paid for capital expenditures during the quarter was RMB 213.8 million (US$34.5 million).
Balance Sheet
As of March 31, 2015, Homeinns Hotel Group had cash and cash equivalents of RMB 747.5 million (US$120.6 million). The outstanding balance of convertible notes due December 2015 (measured at fair value) was RMB 1.03 billion (US$166.5 million).
Outlook for Second Quarter 2015
Homeinns Hotel Group expects total revenues for the Company in the second quarter of 2015 to be in the range of RMB 1,670 million to RMB 1,700 million.
This forecast reflects the Company's current and preliminary views and is subject to change.
This announcement contains translations of certain RMB amounts into U.S. dollars solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB 6.1990 to US$1.00, the noon buying rate for March 31, 2015 set forth in the H.10 statistical release of the Federal Reserve Board.
Conference Call Information
Management will hold an earnings conference call at 9 PM U.S. Eastern Time on Tuesday, May 12, 2015 (9 AM Beijing/Hong Kong Time on Wednesday, May 13, 2015).
Dial-in details for the earnings conference call are as follows:
U.S.: 1855 298 3404 or +1 631 5142 526
China mainland: 4001 200 539
Hong Kong: 800 905 927 or +852 5808 3202
U.K.: 0800 015 9725 or +44 (0) 20 3078 7622
Australia: 1800 801 825 or +61 2 8524 5042
Taiwan: 0080 161 5189 or +886 2 7708 3282
International: +852 5808 3202
Passcode for all regions: Homeinns
A replay of the conference call may be accessed by phone at the following numbers until the end of May 19, 2015 U.S. Eastern Time.
U.S.: 1866 846 0868
China mainland: 4001 842 240
Hong Kong: 800 966 697
U.K.: 0800 169 7301
Australia: +61 2 9641 7900
International: 1800 008 585
Replay Passcode: 9818857
Live and archived webcasts of this conference call will be available at http://english.homeinns.com.
About Homeinns Hotel Group
Homeinns Hotel Group is a leading economy hotel chain in China based on number of hotels and hotel rooms as well as geographic coverage of the hotel chain. Since the Company commenced operations in 2002, it has built Homeinn as one of the best-known economy hotel brands in China. In October of 2011, the Company acquired Motel 168, another well-known hotel chain in China, as its second economy hotel brand. Homeinns Hotel Group aims to offer a consistent product and high-quality services to primarily serve the fast growing population of value-conscious individual business and leisure travelers who demand clean, comfortable and convenient lodging. Homeinns Hotel Group's ADSs, each of which represents two ordinary shares, are currently trading on the NASDAQ Global Select Market under the symbol "HMIN." For more information about Homeinns Hotel Group, please visit http://english.homeinns.com.
Safe Harbor
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Any statements in this press release that are not historical facts are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include our anticipated growth strategies; our future results of operations and financial condition; the economic conditions of China; the regulatory environment in China; our ability to attract customers and leverage our brands; trends and competition in the lodging industry; the expected growth of the lodging market in China; and other factors and risks detailed in our filings with the Securities and Exchange Commission. This press release also contains statements or projections that are based upon information available to the public, as well as other information from sources which management believes to be reliable, but it is not guaranteed by us to be accurate, nor does it purport to be complete. We undertake no obligation to update or revise to the public any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.
Non-GAAP Financial Measures
To supplement Homeinns Hotel Group's unaudited consolidated financial results presented in accordance with U.S. GAAP, Homeinns Hotel Group uses the following non-GAAP measures:
1. total operating costs and expenses excluding share-based compensation
expenses and acquisition and integration costs
2. total leased-and-operated hotel costs excluding share-based compensation
expenses and integration costs
3. personnel costs of franchised-and-managed hotels excluding share-based
compensation expenses
4. sales and marketing expenses excluding share-based compensation expenses
5. general and administrative expenses excluding share-based compensation
expenses and acquisition and integration costs
6. income from operations excluding share-based compensation expenses and
acquisition and integration costs
7. adjusted net income attributable to shareholders excluding any
share-based compensation expenses, foreign exchange gain or loss,
acquisition and integration cost, upfront fee amortization of term loan,
gain or loss from fair value change of convertible notes and interest
swap derivatives and other non-operating expenses
8. adjusted basic and diluted earnings per ADS and per share excluding
foreign exchange gain or loss, share-based compensation expenses, gain on
buy-back of convertible bonds, issuance costs for convertible notes, gain
or loss from fair value change of convertible notes, acquisition and
integration cost, non-operating expenses and upfront fee amortization of
term loan, and
9. adjusted EBITDA excluding foreign exchange gain or loss, share-based
compensation expenses, gain on buy-back of convertible bonds, issuance
costs for convertible notes, gain or loss from fair value change of
convertible notes, acquisition and integration costs, non-operating
expenses and upfront fee amortization of term loan
The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of GAAP and non-GAAP results" set forth at the end of this press release.
Homeinns Hotel Group believes that, used in conjunction with GAAP financial measures, these non-GAAP financial measures provide meaningful supplemental information regarding the Company's performance, and both management and investors benefit from referring to these non-GAAP financial measures in assessing the Company's performance and when planning and forecasting future periods. Management believes that EBITDA, defined as earnings before interest, income tax expense, depreciation and amortization, is a useful financial metric to assess Homeinns Hotel Group's operating and financial performance before the impact of investing and financing transactions and income taxes. In addition, management believes that EBITDA is widely used by other companies in the lodging industry and may be used as an analysis tool by both management and investors to measure and compare Homeinns Hotel Group's operational and financial performance with industry peers.
One of the limitations of using non-GAAP income from operations, EBITDA, adjusted EBITDA and non-GAAP net income attributable to shareholders is that they do not include all items that impact Homeinns Hotel Group's net income (loss) for the period. These non-GAAP measures exclude share-based compensation expenses, foreign exchange gain or loss and gain or loss from fair value change of convertible notes, which have been and will continue to be a significant recurring expense in Homeinns Hotel Group's business. In addition, Homeinns Hotel Group's EBITDA and adjusted EBITDA may not be comparable to EBITDA or similarly titled measures utilized by other companies since such other companies may not calculate EBITDA in the same manner as Homeinns Hotel Group does. Management compensates for this and other limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. Homeinns Hotel Group computes the non-GAAP financial measures using the same consistent method from quarter to quarter. Reconciliations of GAAP and non-GAAP results are included at the end of this press release. The non-GAAP adjustment items do not include the tax impact.
The presentation of EBITDA and adjusted EBITDA should not be construed as an indication that Homeinns Hotel Group's future results will be unaffected by other charges and gains Homeinns Hotel Group considers to be outside the ordinary course of its business.
For investor and media inquiries, please contact:
Ethan Ruan
Homeinns Hotel Group
Tel: +86-21-3337-3333*3872
Email: zjruan@homeinns.com
Cara O'Brien
FTI Consulting
Tel: +852-3768-4537
Email: cara.obrien@fticonsulting.com
[1] "Adjusted net margin rate (non-
GAAP)" is defined as adjusted net
income (non-GAAP) as a
percentage of total revenues.
[2] "Adjusted income from operations
margin rate (non-GAAP)" is
defined as income from operations
excluding share-based
compensation expenses and
integration costs (non-GAAP) as
a percentage of total revenues.
Homeinns Hotel Group
Unaudited Condensed Consolidated Balance Sheet
December 31, 2014 March 31, 2015
----------------- --------------
RMB '000 RMB '000 US$ '000
ASSETS
Current assets:
Cash and cash equivalents 949,690 747,479 120,581
Restricted cash 12,726 12,488 2,015
Accounts receivable, net 95,501 122,822 19,813
Receivables from related parties 3,476 4,946 798
Consumables 44,446 33,405 5,389
Prepayments and other current assets 171,703 155,825 25,137
Deferred tax assets 129,685 131,784 21,259
------- ------- ------
Total current assets 1,407,227 1,208,749 194,992
--------- --------- -------
Investment 11,709 13,109 2,115
Property and equipment, net 4,000,041 3,903,069 629,629
Goodwill 2,323,241 2,323,241 374,777
Intangible assets, net 1,126,636 1,114,493 179,786
Other assets 90,995 101,990 16,453
Non-current deferred tax assets 434,847 468,932 75,646
------- ------- ------
Total assets 9,394,696 9,133,583 1,473,398
========= ========= =========
LIABILITIES
Current liabilities:
Accounts payable 86,949 57,918 9,343
Payables to related parties 4,166 4,733 764
Financial liability, current portion[2] 1,029,577 1,032,393 166,542
Salaries and welfare payable 228,127 113,751 18,350
Income tax payable 117,830 82,489 13,307
Other taxes payable 34,074 46,000 7,421
Deferred revenues 225,417 229,125 36,962
Other unpaid and accruals 255,460 267,560 43,162
Other payables 742,853 640,184 103,273
Deferred tax liability 60,764 60,764 9,802
------ ------ -----
Total current liabilities 2,785,217 2,534,917 408,926
--------- --------- -------
Deferred rental 705,284 716,194 115,534
Deferred revenues 51,289 50,046 8,073
Deposits due to franchisees 144,892 147,572 23,806
Other long term payables 13,018 13,244 2,136
Unfavorable lease liabilities 331,282 322,197 51,976
Deferred tax liabilities 292,575 293,934 47,416
------- ------- ------
Total liabilities 4,323,557 4,078,104 657,867
--------- --------- -------
Commitments and contingencies
Shareholders' equity
Ordinary shares (US$0.005 par value; 200,000,000 shares authorized, 95,703,960 and 96,052,580 shares
issued and outstanding as of December 31, 2014 and March 31 2015, respectively) 3,698 3,710 598
Additional paid-in capital 3,191,076 3,214,521 518,555
Statutory reserves 256,013 256,013 41,299
Retained earnings 1,604,246 1,566,675 252,730
Less: Treasury stock (0 and 31,694 shares as of December 31, 2014 - (2,320) (374)
and March 31 2015, respectively)
Total Home Inns shareholders' equity 5,055,033 5,038,599 812,808
--------- --------- -------
Noncontrolling interests 16,106 16,880 2,723
------ ------ -----
Total shareholders' equity 5,071,139 5,055,479 815,531
--------- --------- -------
Total liabilities and shareholders' equity 9,394,696 9,133,583 1,473,398
========= ========= =========
- - -
Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.1990
on March 31, 2015, representing the certificated exchange rate published by the Federal Reserve Board.
Note 2?Financial liabilities represent convertible notes measured at fair value.
Homeinns Hotel Group
Unaudited Condensed Consolidated Statement of Operations
Quarter Ended
-------------
March 31, 2014 December 31, 2014 March 31, 2015
-------------- ----------------- --------------
RMB '000 RMB '000 RMB '000 US$ '000
Revenues:
Leased-and-operated hotels 1,279,204 1,391,084 1,244,734 200,796
Franchised-and-managed hotels 193,254 244,219 225,733 36,414
------- ------- ------- ------
Total revenues 1,472,458 1,635,303 1,470,467 237,210
Less: Business tax and related surcharges (94,264) (100,323) (88,351) (14,252)
------- -------- ------- -------
Net revenues 1,378,194 1,534,980 1,382,116 222,958
--------- --------- --------- -------
Operating costs and expenses:
Leased-and-operated hotel costs -
Rents and utilities (559,579) (564,347) (583,473) (94,124)
Personnel costs (270,666) (256,033) (276,076) (44,536)
Depreciation and amortization (180,145) (187,816) (195,595) (31,553)
Consumables, food and beverage (70,338) (97,864) (78,239) (12,621)
Others (130,978) (192,474) (130,786) (21,098)
-------- -------- -------- -------
Total leased-and-operated hotel costs (1,211,706) (1,298,534) (1,264,169) (203,932)
Personnel costs of Franchised-and-managed hotels (38,549) (34,280) (44,013) (7,100)
Sales and marketing expenses (25,035) (22,700) (22,250) (3,589)
General and administrative expenses (71,157) (77,426) (73,916) (11,924)
------- ------- ------- -------
Total operating costs and expenses (1,346,447) (1,432,940) (1,404,348) (226,545)
---------- ---------- ---------- --------
Other income 10,639 448 11,525 1,859
Income/(loss) from operations 42,386 102,488 (10,707) (1,728)
------ ------- ------- ------
Interest income 977 3,777 4,339 700
Interest expenses (11,981) (5,674) (5,667) (914)
Loss from equity investment (310) (193) (98) (16)
Gain/(loss) on change in fair value of convertible notes 85,508 (7,851) (9,583) (1,546)
Loss on buy-back of convertible notes - - (91) (15)
Non-operating income - 41,400 17 3
Foreign exchange (loss)/gain, net (15,156) 4,606 (4,061) (655)
------- ----- ------ ----
Income/(loss) before income tax expenses and noncontrolling interests 101,424 138,553 (25,851) (4,171)
------- ------- ------- ------
Income tax expense (25,465) (53,064) (10,946) (1,766)
Net income/(loss) 75,959 85,489 (36,797) (5,937)
------ ------ ------- ------
Less:Net income attributable to noncontrolling interests (1,094) (918) (774) (125)
------ ---- ---- ----
Net income/(loss) attributable to ordinary shareholders 74,865 84,571 (37,571) (6,062)
====== ====== ======= ======
Earnings per share
- Basic 0.79 0.88 (0.39) (0.06)
==== ==== ===== =====
- Diluted 0.05 0.88 (0.39) (0.06)
==== ==== ===== =====
Weighted average ordinary shares outstanding
- Basic 94,873 95,655 95,776 95,776
====== ====== ====== ======
- Diluted 102,647 95,655 95,776 95,776
======= ====== ====== ======
Share-based compensation expense was included in the statement of operations as follows:
Leased-and-operated hotel costs - Personnel costs 2,432 1,856 2,016 325
Personnel costs of Franchised-and-managed hotels 3,838 3,479 3,817 616
Sales and marketing expenses 253 179 241 39
General and administrative expenses 18,964 15,810 18,227 2,940
Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.1990 on March 31, 2015, representing the certificated exchange rate published by the Federal Reserve Board.
Homeinns Hotel Group
Reconciliation of GAAP and Non-GAAP Results
Quarter Ended March 31, 2015
----------------------------
GAAP %of Total Share-based Integration %of Total Non-GAAP %of Total
Result Revenue Compensation cost Revenue Result Revenue
------ ------- ------------ ---- ------- ------ -------
RMB '000 RMB '000 RMB '000 RMB '000
(unaudited) (unaudited) (unaudited) (unaudited)
Leased-and-operated hotel costs (1,264,169) 86.0% 2,016 1,179 0.2% (1,260,974) 85.8%
Personnel costs of Franchised-and-managed hotels (44,013) 3.0% 3,817 - 0.3% (40,196) 2.7%
Sales and marketing expenses (22,250) 1.5% 241 - 0.0% (22,009) 1.5%
General and administrative expenses (73,916) 5.0% 18,227 317 1.3% (55,372) 3.8%
------- ------ --- -------
Total operating costs and expenses (1,404,348) 95.5% 24,301 1,496 1.8% (1,378,551) 93.7%
========== ====== ===== ==========
(Loss)/income from operations (10,707) 0.7% 24,301 1,496 1.8% 15,090 1.0%
======= ====== ===== ======
Quarter Ended March 31, 2015
----------------------------
GAAP %of Total Share-based Integration %of Total Non-GAAP %of Total
Result Revenue Compensation cost Revenue Result Revenue
------ ------- ------------ ---- ------- ------ -------
US$ '000 US$ '000 US$ '000 US$ '000
(unaudited) (unaudited) (unaudited) (unaudited)
Leased-and-operated hotel costs (203,932) 86.0% 325 190 0.2% (203,417) 85.8%
Personnel costs of Franchised-and-managed hotels (7,100) 3.0% 616 - 0.3% (6,484) 2.7%
Sales and marketing expenses (3,589) 1.5% 39 - 0.0% (3,550) 1.5%
General and administrative expenses (11,924) 5.0% 2,940 51 1.3% (8,933) 3.8%
------- ----- --- ------
Total operating costs and expenses (226,545) 95.5% 3,920 241 1.8% (222,384) 93.7%
======== ===== === ========
(Loss)/income from operations (1,728) 0.7% 3,920 241 1.8% 2,433 1.0%
====== ===== === =====
Quarter Ended December 31, 2014
-------------------------------
GAAP %of Total Share-based Integration %of Total Non-GAAP %of Total
Result Revenue Compensation cost Revenue Result Revenue
------ ------- ------------ ---- ------- ------ -------
RMB '000 RMB '000 RMB '000 RMB '000
(unaudited) (unaudited) (unaudited) (unaudited)
Leased-and-operated hotel costs (1,298,534) 79.4% 1,856 1,478 0.2% (1,295,200) 79.2%
Personnel costs of Franchised-and-managed hotels (34,280) 2.1% 3,479 - 0.2% (30,801) 1.9%
Sales and marketing expenses (22,700) 1.4% 179 - 0.0% (22,521) 1.4%
General and administrative expenses (77,426) 4.7% 15,810 317 1.0% (61,299) 3.7%
------- ------ --- -------
Total operating costs and expenses (1,432,940) 87.6% 21,324 1,795 1.4% (1,409,821) 86.2%
========== ====== ===== ==========
Income from operations 102,488 6.3% 21,324 1,795 1.4% 125,607 7.7%
======= ====== ===== =======
Quarter Ended March 31, 2014
----------------------------
GAAP %of Total Share-based Integration %of Total Non-GAAP %of Total
Result Revenue Compensation cost Revenue Result Revenue
------ ------- ------------ ---- ------- ------ -------
RMB '000 RMB '000 RMB '000 RMB '000
(unaudited) (unaudited) (unaudited) (unaudited)
Leased-and-operated hotel costs (1,211,706) 82.3% 2,432 1,784 0.3% (1,207,490) 82.0%
Personnel costs of Franchised-and-managed hotels (38,549) 2.6% 3,838 - 0.3% (34,711) 2.4%
Sales and marketing expenses (25,035) 1.7% 253 - 0.0% (24,782) 1.7%
General and administrative expenses (71,157) 4.8% 18,964 317 1.3% (51,876) 3.5%
------- ------ --- -------
Total operating costs and expenses (1,346,447) 91.4% 25,487 2,101 1.9% (1,318,859) 89.6%
========== ====== ===== ==========
Income from operations 42,386 2.9% 25,487 2,101 1.9% 69,974 4.8%
====== ====== ===== ======
Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.1990 on March 31, 2015, representing the certificated exchange rate published by the Federal Reserve Board.
Homeinns Hotel Group
Reconciliation of GAAP and Non-GAAP Results (continued)
Quarter Ended
-------------
March 31, December 31, March 31,
2014 2014 2015
---- ---- ----
RMB '000 RMB '000 RMB '000 US$ '000
(unaudited) (unaudited) (unaudited) (unaudited)
Net income/(loss) attributable to ordinary shareholders (GAAP) 74,865 84,571 (37,571) (6,062)
Foreign exchange loss/(gain), net 15,156 (4,606) 4,061 655
Share-based compensation 25,487 21,324 24,301 3,920
Integration cost 2,101 1,795 1,496 241
Loss on buy-back of convertible notes - - 91 15
(Gain)/loss on change in fair value of convertible notes (85,508) 7,851 9,583 1,546
------- ----- ----- -----
Adjusted net income attributable to ordinary shareholders (Non-GAAP) 32,101 110,935 1,961 315
====== ======= ===== ===
Quarter Ended
-------------
March 31, December 31, March 31,
2014 2014 2015
---- ---- ----
RMB '000 RMB '000 RMB '000 US$ '000
(unaudited) (unaudited) (unaudited) (unaudited)
Earnings per share (GAAP)
- Basic 0.79 0.88 (0.39) (0.06)
==== ==== ===== =====
- Diluted 0.05 0.88 (0.39) (0.06)
==== ==== ===== =====
Weighted average ordinary shares outstanding
- Basic 94,873 95,655 95,776 95,776
====== ====== ====== ======
- Diluted 102,647 95,655 95,776 95,776
======= ====== ====== ======
Adjusted earnings per share (Non-GAAP)
- Basic 0.34 1.16 0.02 0.00
==== ==== ==== ====
- Diluted 0.34 1.13 0.02 0.00
==== ==== ==== ====
Weighted average ordinary shares outstanding
- Basic 94,873 95,655 95,776 95,776
====== ====== ====== ======
- Diluted 95,193 102,704 95,776 95,776
====== ======= ====== ======
Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.1990 on March 31, 2015, representing the certificated exchange rate published by the Federal Reserve Board.
Note 2: The non-GAAP adjustment items do not include the tax impact.
Homeinns Hotel Group
Reconciliation of GAAP and Non-GAAP Results (continued)
Quarter Ended
-------------
March 31, December 31, March 31,
2014 2014 2015
---- ---- ----
RMB '000 RMB '000 RMB '000 US$ '000
(unaudited) (unaudited) (unaudited) (unaudited)
Net income/(loss) 75,959 85,489 (36,797) (5,937)
Interest income (977) (3,777) (4,339) (700)
Interest expenses 11,981 5,674 5,667 914
Income tax expense 25,465 53,064 10,946 1,766
Depreciation and amortization 185,507 193,863 201,508 32,507
------- ------- ------- ------
EBITDA (Non-GAAP) 297,935 334,313 176,985 28,550
------- ------- ------- ------
Foreign exchange loss/(gain), net 15,156 (4,606) 4,061 655
Share-based compensation 25,487 21,324 24,301 3,920
Integration cost 2,101 1,795 1,496 241
Loss on buy-back of convertible notes - - 91 15
(Gain)/loss on change in fair value of convertible notes (85,508) 7,851 9,583 1,546
------- ----- ----- -----
Adjusted EBITDA (Non-GAAP) 255,171 360,677 216,517 34,927
======= ======= ======= ======
%of total revenue 17.3% 22.1% 14.7% 14.7%
Note 1: The "Depreciation and amortization expense" includes the depreciation and amortization expenses of the Group.
The depreciation and amortization expenses of all leased-and-operated hotels are included in "Operating costs and expenses".
The depreciation and amortization expenses of administrative long-term assets are included in "General and administrative expenses".
Home Inns & Hotels Management Inc.
Operating Data
As of and for the quarter ended
-------------------------------
March 31, 2014 December 31, 2014 March 31, 2015
-------------- ----------------- --------------
Group Group Group
Total Hotels in operation: 2,241 2,609 2,661
Leased-and-operated hotels 876 914 912
Franchised-and-managed hotels 1,365 1,695 1,749
Total rooms 262,321 296,075 300,866
Occupancy rate (as a percentage) 81.3% 79.6% 79.3%
Average daily rate (in RMB) 156 163 151
RevPAR (in RMB) 127 130 120
Like-for-like performance for hotels opened for at least 18 months at the end of the period
As of and for the quarter ended
-------------------------------
March 31, 2014 March 31, 2015
-------------- --------------
Group Group
Total Hotels in operation: 1,991 1,991
Leased-and-operated hotels 859 859
Franchised-and-managed hotels 1,132 1,132
Total rooms 231,791 231,041
Occupancy rate (as a percentage) 83.5% 80.8%
Average daily rate (in RMB) 156 151
RevPAR (in RMB) 130 122
"Occupancy rate" refers to the total number of occupied rooms divided by the total number of available rooms in a given period.
"Average daily rate" refers to total hotel room revenues divided by the total number of occupied rooms in a given period.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/homeinns-hotel-group-reports-first-quarter-2015-financial-results-300082193.html
SOURCE Homeinns
